ProTek Capital Inc (PRPM)

[dukeb]

MJ Dispensaries are hurting. Do a little DD.

Here's a start:

http://www.usatoday.com/story/news/nation/2014/11/03/irs-limits-profits-marijuana-businesses/18165033/

Short version: Since the general government treats MJ as an illegal substance it has directed the IRS to limit deductions available to MJ related businesses. While MJ dispensaries can deduct their direct cost-of-goods sold (what they pay to acquire the product) they are NOT permitted to deduct expenses any other business can take. That includes employee salary, rent, utilities, etc.

Owners of MJ dispensaries are essentially federally taxed on their revenue less the cost of what they pay for product.

There is talk about changing the law, but there has been no serious movement.

Anyone who sees big profits in MJ Dispensaries doesn't know what they are talking about.

"The problem is that we have passed laws that allowed these medical marijuana and recreational marijuana companies to do business," said Mac Clouse, a University of Denver finance professor who studies the industry. "But we have all these other laws, tax laws, federal laws that make it incredibly difficult if not utterly impossible to survive."